The United States arm of global cryptocurrency exchange Bittrex Global formally filed for Chapter 11 bankruptcy in the state of Delaware on Monday, May 8th, just weeks after the US Securities and Exchange Commission (SEC) slapped it with an enforcement action.
Bittrex’s co-chief restructuring officer Evan Hengel remarked in the filing made in Delaware that his company faced a somewhat untenable regulatory environment in light of the current lack of regulatory structure in the United States regarding the cryptocurrency sector.
Hengel added that the economic environment was also not ideal for the crypto exchange as current circumstances have had an adverse effect on the digital asset sector overall, resulting in unwarranted regulatory issues as well as the mounting cost of regulatory compliance.
However, Hengel was quick to assure Bittrex’s US customers that they would get a 100% like-kind cryptocurrency distribution as part of the company’s liquidation plan. This will enable customers to access the platform despite the closure and withdraw their digital assets.
According to official data, Bittrex currently has over 100,000 creditors along with liabilities and assets within the range of $500 million to $1 billion.
A Rough Time
2023 has, so far, not been a good time for Bittrex and even for other crypto entities.
Bittrex’s U.S. branch has had a rough 2023 so far, laying off 80 people in February and announcing in March that it would end all operations by the end of April. These changes have not affected Bittrex Global, the non-U.S. crypto exchange.
Prior to its announcement back in March that it would cease US operations in April, Bittrex US laid off around 80 of its employees earlier this year.
Likewise, despite having announced the end of its operations in the US, the exchange was still sued by the SEC last month. This was alleged because Bittrex had been operating a national securities exchange as well as a brokerage and clearing agency.
The Commission also filed charges against the exchange’s parent company Bittrex Global as well as its former chief executive Bill Shihara.
While changes in the United States are not bound to affect Bittrex Global, its chief executive Oliver Linch was moved to say that its US arm would contest the charges in court. However, the recent bankruptcy filing could make this particular case an uphill battle for the company.
The fall of Bittrex US is just the latest in a growing list of crypto firms that have filed for bankruptcy over the past several months. The company joins fellow exchange FTX in the broke zone, along with lending firms BlockFi, Celsius, and Voyager.